MARKET REPORT December
22, 2014
Markets continued with its up move and short covering continued
on Friday as well as the Markets went on to end with gains on the second day
running though it resisted to its 50-DMA at Close. The markets saw a minor gap
up opening again and after opening positive the Markets went on to post gains
gradually. It went on to form the day’s high of 8263.45 by late morning trade.
The Markets thereafter traded in a sideways trajectory trading in 25-odd points
range. In the second half of the session, though the market overall maintained
its gains, it came off from its day’s high. It finally ended the day at
8225.20, posting a net gain of 65.90 points or 0.81% forming a higher top and higher
bottom on the Daily Bar Charts.
MARKET TREND FOR MONDAY, DECEMBER 22, 2014
Markets will now see a very important session as it has
resisted to its 50-DMA levels at Close. We are likely to see a quiet to
modestly positive opening and the levels of 8235, which is the 50-DMA for the
Markets would be the critical levels to watch out for. It would be critically
important for the Markets to open or move past this level in order to avoid any
weakness from keeping in again. The intraday trajectory would also remain
equally important.
The levels of 8235 and 8310 would act as immediate
resistance for the Markets. The supports would come in at 8190 and 8150 levels.
The RSI—Relative Strength Index on the Daily Chart is
44.9466 and it is neutral as it shows no bullish or bearish divergence or any
failure swing. The Daily MACD still continues to remain bearish trading below
its signal line but has flattened out.
On the derivative front, the NIFTY December futures have
shed over 22.45 lakh shares or 10.19% in Open Interest. The January futures
have added over 27.22 lakh shares or 75.33% in Open Interest. The rollovers
have been seen but at the same time, most of the pullback has come in form of
short covering. It would be important for the Markets to see fresh buying and
addition of OI for it to continue with its up move.
Going by pattern analysis, the Markets have resisted to its
50-DMA which is 8235. On its way down, the Markets had broken the support of
its 50-DMA and therefore, this level of 50-DMA is now acting as its resistance
on its way up. It would be important for the Markets to move past and end above
the 50-DMA levels in order to avoid any weakness from creeping in again. Moving
past 50-DMA would be important for the Markets to continue with its up move /
pullback.
Overall, while continuing with policy of maintaining limited
exposure in the Markets, some minor purchases in very selective manner can be
made. Even if we see some minor range bound swings, they would remain rollovers
dominated and therefore stock specific action and sectoral out performance
would remain. While remaining highly selective and stock specific, positive
caution is advised for the day.
Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
+91-98250-16331
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